Volume I, No. II
Customs is putting the IEEPA refund on a permanent paperwork footing, and the finally liquidated entries still sit outside it
A July 8 notice asks for comment on the CAPE declaration that importers use to reclaim an estimated $166 billion in invalidated IEEPA duties. It also shows how much of the refund now depends on an appeal and a lawsuit.
“With respect to any and all unliquidated entries that were entered subject to the IEEPA duties, U.S. Customs and Border Protection is hereby directed to liquidate those entries without regard to the IEEPA duties.” That sentence, from a March 4 order of the Court of International Trade, is reproduced in a notice that CBP published in the Federal Register on July 8, 20261. The notice is formally modest: a request for comment, due September 8, on the paperwork importers file to claim refunds of the tariffs the Supreme Court struck down in February1. Its substance is larger. It converts an emergency improvisation, the Consolidated Administration and Processing of Entries tool known as CAPE, into a standing information collection, and it sets out in the government’s own words how a refund of an estimated $166 billion across more than 53 million entry summaries is meant to work1. The refund of an invalidated tariff has become a customs procedure in its own right, and procedures have edges. The sharpest edge, for entries whose liquidation is already final, lies outside the form altogether.
The instrument
The authority being unwound is the International Emergency Economic Powers Act (IEEPA), the 1977 statute under which the President imposed drug-trafficking tariffs on Canada, Mexico and China and the “reciprocal” tariffs of at least 10 percent on imports from all trading partners2. On February 20, 2026, in Learning Resources, Inc. v. Trump, decided together with Trump v. V.O.S. Selections, Inc., the Supreme Court held that “IEEPA does not authorize the President to impose tariffs”2. The vote was six to three. Justice Kavanaugh, writing for the dissenters, observed that the Court “says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers,” and predicted that the process was likely to be a “mess,” as had been acknowledged at oral argument2.
The answer came from the Court of International Trade. Its March 4 order in Atmus Filtration, Inc. v. United States directed CBP to liquidate unliquidated entries without the IEEPA duties and to reliquidate liquidated entries “for which liquidation is not final”1. The court suspended the order “to the extent that it directs immediate compliance” so that CBP could build an automated tool, and required periodic status reports. When Atmus dismissed its case in April, Euro-Notions Florida, Inc. v. United States replaced it as the test case, under a substantively identical injunctive order of April 71. De minimis entries are expressly set aside for a separate case, Axle of Dearborn, Inc. v. Department of Commerce1.
The limit of the instrument is a single word in the order: final. Under section 514 of the Tariff Act of 1930, CBP’s decisions on liquidation become final and conclusive unless an importer protests within 180 days7. The universal order reaches entries that have not crossed that line. Entries that have crossed it are where the government has chosen to fight.
The mechanism: how does an importer claim an IEEPA refund through CAPE?
The July 8 notice describes the claim in operational terms1. An importer of record, or a licensed customs broker named as its “notify party” in the Automated Commercial Environment (ACE), uploads a comma-separated file listing entry summary numbers. That upload is the “CAPE Declaration.” Each declaration may list up to 9,999 entry summaries, and an importer may file as many as it needs. CBP screens and validates each file before accepting it; a rejected file must be corrected and resubmitted. The tool consolidates what would have been thousands of refund transactions into a single electronic payment, and it separates the refundable IEEPA lines from everything else on the entry. Antidumping and countervailing duties, Section 232 tariffs, taxes and fees stay collected1.
Two features of the procedure deserve attention from compliance officers. First, only ACE account holders can file. CBP acknowledges that most small businesses lack an account and says it expects them to use brokers, adding that it “may develop an alternative process for small businesses” if comments show the burden is excessive1. Second, refunds go only by Automated Clearing House transfer, under an interim final rule on electronic refunds published in January 2026. CBP is holding refunds for filers with no ACH account on file in ACE and says it sees no need for a procedure outside that rule1.
CBP’s burden estimate gives the scale of the exercise as the agency sees it: 330,000 respondents filing 1.5 declarations each, or 495,000 declarations a year at one hour apiece, plus 33,000 replacement files1. The collection was first approved on an emergency basis because CBP had told the court, on March 6, that CAPE would be ready on April 201. The 60-day notice is the ordinary process catching up.
The tool has been delivered in phases. Phase 1 opened on April 20 for unliquidated entries and those liquidated within the preceding 80 days3,4. Phase 2 went live on June 29 for entries flagged for reconciliation, about 2.8 million entries carrying some $28.7 billion in refunds3,6. Phase 3, for finally liquidated entries, was targeted for late July3,4.
The effect
By the June 9 hearing before Judge Richard Eaton, CBP’s executive assistant commissioner for trade, Susan Thomas, testified that Phase 1 had accepted claims covering about $90 billion of the $166 billion collected, and about $23 billion had been approved and sent to the Treasury Department for payment3. In its first six weeks, CAPE processed refunds on nearly 8.5 million entries. In the whole of the previous fiscal year, CBP processed refunds of every type on 338,0003. PPAI, reporting the same hearing, put entries accepted for processing at more than $95 billion and recorded CBP’s expectation of more than $60 billion in approved refunds by July 14. Thomas said about 95 percent of entries should be eligible once Phase 3 is running4,6.
The remaining 5 percent is where the burden falls. Finally liquidated entries account for about $11.4 billion, or 6.9 percent, of IEEPA payments, according to figures reported by PPAI and Supply Chain Dive4,6. In early June the Justice Department appealed the trade court’s universal refund orders to the Federal Circuit3,5. Its position, stated at the June 9 hearing, is that “the court cannot order the government to refund money to non-plaintiffs”3. Holland & Knight reports that Phase 3 refunds “will be processed only for importers who have filed lawsuits,” and that about 4,000 plaintiff importers stand to recover everything through the three phases if CBP proceeds as planned3. Michael Lowell of Reed Smith put the government’s aim bluntly: “The government is trying to keep as much of the remaining money as possible”5.
The practical sorting is therefore by litigation status, not by the merits, which are settled. An importer with recent, unliquidated entries and an ACE account is near the front of the queue. An importer whose entries liquidated long ago, and who has not sued, depends on the outcome of an appeal in which, as of mid-June, the government had not yet filed its opening brief3. Counsel have advised mapping each entry to a phase and considering a protective filing at the trade court while pursuing CAPE in parallel3.
The longer view
There is one close precedent, and it ran through the same court. On March 31, 1998, in United States v. United States Shoe Corp., the Supreme Court held the Harbor Maintenance Fee unconstitutional as applied to exports8. The Customs Service stopped collecting it on April 25, 1998, announced that it would not decide protests on the export fee, and said that under an April 6 order of the Court of International Trade the government would “design a claim form for refund claims,” available for all claims filed within the two-year limitations period for cases under 28 U.S.C. 1581(i)8. The structure then, as now, was a court-ordered claim form standing in for the ordinary protest. The differences are of scale and of timing. The harbor fee was a narrow levy on exporters. The IEEPA refund covers tens of millions of entries, and it is being built while the government contests how far the court’s order may reach1,3.
The calendar for the coming months is set out in the record. Comments on the CAPE collection close September 8, after which CBP will send the request to the Office of Management and Budget1. Phase 3 is targeted for late July3,4. The Federal Circuit appeal, by counsel’s estimate, will take months3. And the trade court retains the power to lift its suspension “at any time” if CAPE falls behind1. Whether an importer that never sued will see a refund on a finally liquidated entry is the question none of these documents answers.